When things are going well for you, You feel great. But, when the black streak comes, Your life can turn into a nightmare. You can make money for weeks and lose everything in a few minutes. This situation repeats itself over and over, traders of all generations met with her. Therefore, everyone should be aware of this possibility and be ready to turn the game around.. Rational observation and logical reasoning will allow you to find answers to the necessary questions..
In this article, we intend to consider just one question.: “What makes the lucky trader from a loser?”.
The following 11 observations help me stay on track. You can group these observations into a table and use it as a measure of a trader's success..
Observation № 1
The largest number of losers are in the intraday or short-term trader group. The reason for this is not even in a tight time frame., and in that, that many of these traders lack good preparation and a thoughtful game plan. This type of trading does not forgive even minute mistakes., manipulations in it are the most risky, while losses, due to lack of knowledge and training, increase many times. Besides, these traders very often do not have sufficient capital. Lucky traders, mostly, trade in medium and long term time ranges.
Output:
Trading in the medium and long-term time frames provides a higher probability of success from a statistical point of view. The same can be said about capitalization. The more the initial capital, the greater the chance to survive.
Observation № 2
Traders – losers often use complex systems and methodologies and rely on the advice of gurus and “black boxes”. Lucky traders, vice versa, use simple techniques. They all use either modified versions of existing techniques., or systems, invented by them on their own.
Output:
There is a misconception that, what “complicated” means “best”. However, this is not necessarily the case.. Logically it can be proved, that simpler techniques tend to be more practical and less prone to misinterpretation. In fact, it is not that important, “простая” technology or “complex”. What matters is, you can make money with this system or not. Hence we can conclude, that the most important role in the trading process is played by your own thoughts and analysis. This can explain, why do traders often, which have only two qualities – persistence and patience, do better, than educated super-intellectuals or even geniuses.
Observation № 3
Traders – loser often rely on computer systems and indicators. They do not waste time studying the mathematical basis of these systems and usually consider “pop” their use case. Lucky traders understand the benefits of using a computer – such, as the ability to quickly analyze large amounts of data and many markets. However, they often do not hesitate to draw charts on paper, using such outdated tools, like a pencil, protractor and calculator. They are trying to learn the mathematical principles of averages and oscillators., and can, в случае необходимости, draw them yourself, without any computers. They understand the mechanism of the market in every detail..
Output:
If you want to be successful in any field of activity, it is necessary to understand the principles of the functioning of all mechanisms, involved in this area. Can be hammer in nuts, but this is not the most practical way out.
Observation № 4
Traders – losers spend a lot of time, analyzing, where will the market be tomorrow. Lucky traders spend more time thinking about their reactions to, how to react to the current market movement and plan your strategy accordingly.
Output:
The trader will be lucky, if he can predict, what will be the reaction of the crowd in a given situation. If he is able to respond to the irrational buying and selling of the crowd with a rational course of action, the chance of winning is always increasing. From this we can conclude, that being a successful trader is easier, than being a lucky analyst, because. the analyst must predict market movements and recommend, how to get the maximum profit. If you ask a lucky trader, which way the market will go tomorrow, he will most likely shrug his shoulders and answer, what will follow the market, wherever he goes. This answer seems empty, but testifies to the fact, that the trader is closely following the market movement.
Observation № 5
Traders – losers focus on winning trades, and lucky traders pay attention to losing trades, return and risk-to-reward ratio.
Output:
Observation leads us to the conclusion, it is much more important to pay attention to risk, than profit or loss. A lucky trader takes into account, how much money can he make, how much to lose, and pays no attention to hypothetical highs and lows, which are associated with “right” And “неправильным”.
Observation № 6
Traders – losers are often unable to control their emotions. Lucky traders are aware of their emotions and only then proceed to analyze the market situation. If the situation has not changed, emotions are ignored. Otherwise, the emotion is recognized as correct and the position is closed.
Output:
If a trader opens and closes positions, based only on emotions, then his approach to the market is neither practical, neither rational. But, oddly enough, those traders are wrong too, who completely ignore their emotions. In some situations, this approach can cause mental illness., which arise from psychological stress. Besides, then some trading skills are lost, which are stored in the subconscious of everyone. It's best to accept every emotion, and then watch, are those reasons still preserved, which we have taken this or that step. We can find confirmation of our conclusion in that, that even very methodical traders sometimes exit for no apparent reason, often taking profit “tick to tick”. This is usually called “везением”.
Observation № 7
Failed traders are very concerned about, чтобы оказаться правыми. They love a state of euphoria, when adrenaline appears in the blood. They like to follow the market 24 hours a day. One friend of mine was joking, that the new trader will not enter the room, if there is no display with quotes. As for the established traders, then they recognize emotions, but do not let them prevail. They don't have to constantly look at quotes.. They don't try to be right all the time.. They only pay attention to, what can bring money, what can't. They look at the whole process, as an intellectual game, in which you have to take a decisive bribe.
Output:
It's important to stay in sync with the market, however, it is also important, so that trading does not mix with your personal life. Extreme stress leads to psychological and physical degradation. Lucky traders try to react quickly to the situation., but for them it's work, not addiction.
Observation № 8
When a loser trader loses, he buys a new book or system and starts working on it. Lucky trader analyzes, what happened, adjusts its methodology taking into account new data received. He does not upgrade immediately to the new system, but does it only then, when it becomes clear, that the old system has not justified itself. The best traders use methods, endemic to the market structure, which will always work. Возможность того, that the market itself will change so much, that this system will become ineffective, очень мала.
Output:
The luckiest traders stick to their best practices. They often use one or two techniques., whose profitability has been proven over time. It's better to use one not-so-good system, than jumping from one to another.
Observation № 9
Losers choose famous traders as examples, who made a lot of money and are trying to copy their technique. Lucky traders review all new strategies, however, use them only if, if they fit in terms of their own approach. She also loves to watch, how the market proves the failure of other traders' techniques, drawing conclusions from all this.
Output:
Once again we see, what is the personality of the trader, his knowledge and his own system are much more important, than the achievements of market gurus.
Observation № 10
Losers often overlook many factors, on which the probability of making a profit depends. Lucky traders understand, that the profit is associated with “потоком наличности”. More funds should come to the market, than leaving him. Everything, what influences this process, должно учитываться.
Output:
Everything, what affects profitability, should be taken into account.
Observation № 11
Losers often take things too seriously and lack a sense of humor.. Lucky traders, against, the funniest and most imaginative people in the world. They enjoy trading and are the first to laugh at a good joke.. They take their work seriously., but always ready to laugh at themselves.
Output:
Known, what psychiatrists always define, does the person have a sense of humor. The more serious the person, the more likely it is, that he is sick.
Conclusion
Как удачливый, so the unlucky trader thinks trading is a game. But for the first it is not just a pastime, and calling, to whom he fully devotes himself, guided by the ethics of a professional athlete.
Continuing this metaphor, we might notice, what if trading was a game, like basketball, rookie traders would understand, what three-point shots, which professionals do without visible effort, are the result of a huge number of hours, spent on empty playgrounds. Just like in sports, internal and external factors are decisive.
We have to deal with the market and our own “I”. Any weapon can be used as a preventive measure, and for the purpose of destruction. Every transaction should be treated with professionalism. It would be appropriate to compare trading not only with basketball, but also with sports shooting. Wherein, to hit the target, it is important not only to aim well, but also make sure, that the barrel is not directed at ourselves.
The right targeting methodology can have a surprising impact on your bottom line.. The difference between professional and non-professional approaches is obvious. The first is target shooting, whereas the second – “Russian roulette”.
Walter T. Downs
